Infosys has done it again. Strong fourth-quarter numbers from Infosys and a lower-than-expected rate of inflation saw the markets closing on Friday on a strong note. Amid concerns of lower growth owing to a stronger rupee, Infosys reported a 70 per cent growth in quarterly net profits for the period January-March 2007 from a year-ago period, thus giving a much-needed fillip to the equity markets.
The market got another reason to cheer in inflation numbers released on Friday. The data released on Friday showed that the wholesale price index rose only 5.74 per cent for the 12 months ended March 31, 2007, lower than the expected rate of 5.81 per cent.
While the benchmark index of the Bombay Stock Exchange, the Sensex, celebrated Infosys results by gaining 270.27 points, or 2.06 per cent, to close at 13,384 points, the wider Nifty of the National Stock Exchange rose by 87 points, or 2.28 per cent, to end the day at 3,917.
However, analysts say the Infosys results cannot be considered as the sole determinant of market movement in the days to come as other infotech companies may not be able to deliver as good numbers as those of Infosys.
"The markets look pretty decent now. But you could probably call it a relief rally rather than a bull run. One will have to wait and see if other infotech companies are able to produce results similar to Infosys. The market has not yet found a clear direction," said Sandeep Shenoy, strategist with Pioneer Intermediaries.
Following the results, the infotech sector snapped an interim lull to top gains among sectoral indices. The BSE IT index gained 3.94 per cent during the day to close at 5,071.72 points with shares of Satyam Computers and HCL Technologies leading the pack.